RP to ease inventory requirement for oil cost

RP to ease inventory requirement for oil cost

Dow Jones, Manila

The Philippine government will reduce by half the inventory it
is requiring local oil companies to maintain to prepare for
possible supply bottlenecks as a result of war in Iraq, Energy
Secretary Vincent Perez said Monday.

Perez said he signed last week an order that slashed the
required in-country inventory of oil refiners to 15 days and the
inventory for importers of refined oil products to seven days to
ease an overstocking of fuel.

The government, in preparation for a war in Iraq, in January
required oil refiners to maintain within the country a minimum
stock equivalent to 30 days' supply, while oil product importers
were required to keep an inventory equal to 15 days of sales.

The buildup of oil inventories had exerted pressure on the
peso, since nearly all of the country's oil requirements are
imported.

Perez said that as of Monday, the country's oil stock has
already reached the equivalent of 77 days' supply.

"Of this, 60 days (worth of supplies) are already in the
country - 33 days of which are crude (oil) and 27 days in
finished products," Perez said. He said another 4 million
barrels, equal to 17 days' supply, are on their way to the
country from abroad.

"In April, 7 million barrels (good for 25 days) more will be
shipped to the country to extend our inventory until mid-July,"
Perez added.